1) Local market STI increased approximately 11% year to date, 17% from Oct 2011 lows. There were similar returns across regional markets. US markets increase at a lower rate, roughly about 7% YTD.

2) The reasons contributing to the buoyant stock markets have little to do with market fundamentals. It is the consequent of central banks printing money as European Central Bank pledged to lend out 489B EUROS to ease potential credit crunch in Dec 2011. This is as good as providing cheap credit to banks which enable them to lend out more cheaply for investments. This money are flowing to Asia and emerging market regions. Just last week, funds investing in regional equities drew a net inflow of US$430M. This is the 4th straight month of inflows to Asian regions, which explains the 5th straight week of regional equities market appreciation.

3) Aussie dollars appreciated as stock markets rallied. (Read more…)